Erythropoietin and its receptor are critical for erythropoiesis and are also expressed in the nervous system. Prior to death in utero due to severe anemia mice that lack the erythropoietin receptor have fewer neural progenitor cells and differentiated neurons are markedly sensitive to hypoxia, suggesting that during development erythropoietin stimulates neural cell proliferation and prevents neuron apoptosis by promoting oxygen delivery to brain or by direct interaction with neural cells. We determined erythropoietin receptor expression is higher in neural progenitor cells and is down regulated but persists in mature neurons. Erythropoietin stimulates proliferation of neural progenitor cells but less effective than FGF, and is not effective in the presence of FGF. Mice that selectively lack erythropoietin receptor in neural cells but express erythropoietin receptor in hematopoietic tissue driven by the endogenous promoter exhibit normal hematopoiesis and survive to adulthood. However, these mice exhibit increased apoptosis in the developing brain and reduced neural progenitor cell in the adult hippocampus and subventricular zone with increased sensitivity to hypoxia and glutamate neurotoxicity. In endothelial cells, erythropoietin has been shown to stimulate nitric oxide production particularly at low oxygen tension. Furthermore, erythropoietin receptor expression on neural cells and erythropoietin neuroprotective effect were regulated by nitric oxide . Hypoxia increased nitric oxide production as well as erythropoietin receptor, and inhibition of nitric oxide synthase activity reduced the proportion of erythropoietin receptor expressing neurons induced at low oxygen tension. Conversely, addition of nitric oxide donor to cultures grown under normoxia induced erythropoietin receptor. Similarly nitric oxide donor increased erythropoietin receptor promoter activity in a reporter gene assay suggesting that nitric oxide regulates erythropoietin receptor at the transcription level. Preincubation of neurons with nitric oxide resulting in induction of erythropoietin receptor gave rise to protection against hypoxia even in the absence of exogenous erythropoietin, although at high concentration nitric oxide is toxic. These data provide evidence of a role for nitric oxide in erythropoietin activity in brain and suggest a link between nitric oxide production, erythropoietin receptor expression and erythropoietin signaling in neuroprotection.